Freight broker record keeping: what 49 CFR 371.3 requires

Who the rule applies to

Part 371 applies to brokers of transportation by motor vehicle. 49 CFR 371.2 defines a broker as a person who, for compensation, arranges or offers to arrange the transportation of property by an authorized motor carrier. A motor carrier, its employees and its bona fide agents are not brokers when they arrange shipments the carrier is itself authorized to transport and has accepted and legally bound itself to transport. A bona fide agent, in the regulation's words, is part of the carrier's normal organization, works under the carrier's direction under a preexisting continuing agreement, and has no discretion to allocate traffic between that carrier and others.

The practical test is simple. If you hand a load to a carrier you do not operate, for a fee or a spread, you are brokering it, and the record described below has to exist for it. That holds for a pure brokerage, and for an asset carrier that brokers overflow to partner carriers: the loads your own trucks haul fall under carrier rules, the loads you hand off fall under Part 371. If that split is new to you, our guide to carrier TMS vs broker TMS covers it in more depth.

The regulation also separates two kinds of work. Brokerage service is arranging the transportation or the physical movement of a vehicle or property, on behalf of a carrier, consignor or consignee. Non-brokerage service is everything else a broker does for those parties. The distinction matters because the record treats the two kinds of compensation separately.

The six elements of a 371.3 record

Section 371.3(a) says a broker shall keep a record of each transaction, and lists what the record must show. Each item maps to something that already exists on a well-run load; the work is making sure it is captured every time and can be found again.

A few points the table hides:

• "Originating motor carrier." The rule names the carrier that picks the freight up. If a load moves on more than one carrier, record at least the first one; recording every carrier on the load keeps the file complete for claims and disputes.
• "Registration number." The regulation does not say which number. Keeping the carrier's USDOT number and, where it has one, its MC number on the carrier file covers it.
• Compensation and payer. Item (4) is about what you earned and from whom. In most brokered loads that means the shipper paid you and your compensation is the difference between what you charged and what you paid the carrier, but the record should show the actual arrangement, whichever way the money ran.
• Date of payment to the carrier. Item (6) is not satisfied by an invoice or a payment run that was scheduled. It is the date the carrier was actually paid, which is why the payables side of your system matters as much as the load itself.

Master lists instead of repeating details

Section 371.3(a) lets a broker keep master lists of consignors and of carriers' addresses and registration numbers, rather than repeating that information on every transaction. In practice this is what a customer list and a carrier list in your TMS already are. The load record then only needs to point at the right customer and the right carrier.

The catch is that a master list changes over time. A carrier moves, or a shipper changes its billing address. If a transaction record only points at a list entry that has since been edited, the record may no longer show what was true when the load moved. Two habits avoid the problem: keep a history of changes to customer and carrier records rather than overwriting them, and make sure the documents attached to the load (rate confirmation, BOL, invoice) carry the names and addresses as they stood at the time.

Three years, and who can ask to see it

Retention

Section 371.3(b) requires brokers to keep these records for three years. Part 379, which sets the preservation rules for motor carriers and brokers, adds that retention periods run from the date of the document rather than by calendar year (379.13), and that records may not be destroyed when a company closes until dissolution is final and all pending transactions and claims are completed (379.9). If another agency, such as a tax authority, requires a longer period for the same paper, the longer period still applies (379.3).

Claims files have their own line in the Part 379 schedule: claim registers and supporting data for claims against the company, and for overcharge, damage and other claims the company files against others, are kept one year after settlement (appendix A, item F.2). A cargo claim that takes two years to settle therefore keeps its file well past the three years that apply to the transaction record.

Format and protection

Nothing in the rules requires paper. Section 379.7 allows records to be preserved by any technology that accurately reflects all the information and can be accurately reproduced later. Section 379.5 then requires the company to protect records from destruction, deterioration, unauthorized access, modification and data corruption, and to notify the Secretary if prescribed records are substantially destroyed, damaged, accessed and modified without authorization, or otherwise corrupted. For a brokerage on software, that means user permissions, backups, and an edit trail on anything that counts as part of the record.

Right of review

Section 371.3(c) gives each party to a brokered transaction the right to review the record of that transaction. The parties are typically the shipper or consignee and the carrier. Because the record includes the broker's compensation and the freight charges collected, a carrier exercising this right can see what the shipper paid and what the broker kept. Two practical consequences follow:

• Keep the record clean enough to show. If the numbers in your system do not match your invoices and carrier payments, a review request turns into an argument.
• Be able to produce one transaction quickly. A review request names a load, not your whole book. You should be able to pull the six elements for a single load without exporting everything.

The rest of Part 371 in plain English

Section 371.3 is the record rule, but four short sections around it affect how a brokerage operates and what its records should show.

Subpart B of Part 371 adds further rules for household goods brokers serving individual shippers, including their own three-year retention periods for signed receipts, written estimates, carrier agreements and cancellation records. This article covers general freight brokerage, not household goods moves.

How a broker TMS should hold the record

None of this needs a separate compliance file if the brokerage system is set up so that each load naturally carries its own 371.3 record. When you evaluate a system, or audit the one you have, check each point below against one real load.

• One load, one record. Customer, carrier, BOL number, sell rate, buy rate, accessorials and payments should all hang off the load, so the six elements can be read from one screen or one export.
• Carrier identity on the carrier file. Legal name, address, USDOT and MC numbers, plus the insurance certificates you rely on, kept on the carrier record and referenced from each load.
• Documents back from the carrier. The BOL and POD are the evidence behind item (3). A carrier portal or a reliable intake path for these documents beats chasing them by phone.
• Compensation that is not a guess. Your compensation for item (4) is only right if the sell side and buy side include every accessorial billed and paid. Unbilled detention or a rate change agreed by phone and never entered both distort it.
• Payment dates from payables. Item (6) needs the actual date the carrier was paid, which should come from carrier payables rather than from a note on the load.
• Separate non-brokerage charges. If you sell other services with a load, the system should be able to carry them as separate lines with their own payer, so item (5) can be shown on its own.
• History, not overwrites. An append-only log of offers, changes and responses on the load, and permissions on who can edit financial fields, go a long way toward the protection Part 379 asks for.
• Brokered loads tagged as brokered. For a carrier that also brokers, each load should say which kind it is, so the 371.13 segregation and the 371.3 record apply to the right loads.

When you see a demo, ask the vendor to open one brokered load and show you the six elements without leaving it. Our TMS demo questions include more questions for brokerages.

Where TruckerPro fits

In TruckerPro the brokerage tools live inside the company account. Broker Basic covers customers, rate agreements, accessorials, invoicing, carrier payables and claims, with a carrier portal where carriers accept, decline or counter tenders and upload PODs, bills of lading and insurance certificates. Every offer, counter and response on a tender is logged in its state history, and each carrier's insurance, UCR and IFTA expiry dates are tracked on file. Carriers that also broker get the brokerage tools from the Mobile plan up, on the same account as their own loads.